Indexing wage rates to inflation can solve TAs problems

McGill teaching assistants have voted to strike on April 16, the first day of exams. AGSEM, McGill’s Teaching Support Union, has locked horns with the administration primarily over pay, although there are other issues at stake.This is not the first time that TAs are striking at McGill: there was a two-month strike in 2008 that was particularly grueling. Collective bargaining impasses are not all that uncommon between the two parties. Since its founding in 1993, AGSEM has struck four collective agreements with the University. All except one have involved protracted bargaining.

I want to make the case for indexing future pay increases to inflation for McGill teaching assistants (TAs). Admittedly, this will not completely solve the bargaining problem over pay. The University and the union will still need to agree on an initial fair wage rate. However, once they have done so, indexing to inflation will ensure that they will never need to revisit the question. Because job actions, like strikes, are especially costly on campus and collective bargaining impasses are about pay increases – among other things – McGill would benefit greatly from making future pay increases transparent, automatic, and depoliticized. Not only is this proposal beneficial to undergraduates, it is also in the interest of the University and of graduate students themselves. Indexing to inflation is straightforward, easy to implement, sustainable, and demonstrably fair.

Resolving the issue of pay would therefore not eliminate all need for bargaining, but it would take the thorniest issue off the bargaining table.

Since college students have a very tight calendar, job actions – which would be hardly disruptive in other settings – can be quite costly on campus. For instance, even though we could conceive the planned one-day strike on the first day of exams as symbolic, the disruption could nevertheless be significant. Students trekking up to sit through a major exam will be confronted by soft picket lines and the general disruption caused by invigilators who might be joining the strike. Were there to be an unlimited strike, instead of a one-day strike like we have right now, exams would go ungraded. In general, the rigidity of the academic cycle makes job actions on campus extraordinarily costly to the University, but especially to students.

What, then, should teaching assistants be paid? The University does not engage in price competition when hiring graduate students, because it is the only employer of TAs on campus. As such, the fair wage cannot be set by the market. Obviously, TAs must be paid enough so as to meet a basic standard of living. Beyond that, it is hard to make the case for a specific number. Let us say, for example, that the union and the administration agree on a certain fixed wage per hour. Theoretically, if there is no inflation, then neither the union nor the administration would ever need to revisit the agreement, because the costs for decent living standards would not increase. Since inflation is rarely nonzero, however, the bargain would need to be revisited again and again, with the risk of disruption on campus. If, for instance, they were to agree on a 2 per cent per year increase for the next three years, the union and the University would be back at the table in 2018, fighting over the exact same issue all over again. If the agreement was indexed to inflation, the wages would be adjusted automatically.

For instance, even though we could conceive the planned one-day strike on the first day of exams as symbolic, the disruption could nevertheless be significant.

Here is how indexing for inflation would work. The University and the union would agree on a fair hourly wage rate, a published inflation rate by which to calculate the adjustment, and the frequency of the adjustment. For instance, the two could agree on a baseline wage rate of $30 per hour; the preceding 12-month consumer price inflation figure, published by Statistics Canada; and an annual adjustment to the base rate, effected on May 1 of every year. Inflation-indexing would make future pay increases transparent and automatic. This, in turn, would depoliticize the entire issue.

If indexing to inflation is so reasonable, why is it so uncommon? The reason is simple. Workers bargain both for restoring living standards (which indexing could fix) and a share of gains in productivity (which indexing cannot address). The latter does not apply to graduate students. Indeed, graduate study is best regarded as an apprenticeship: the real monetary rewards lie in the future. So indexing to inflation is particularly well-suited to the TAs’ collective bargaining problem.

With a definite wage increase tied to inflation, graduate students would not have to worry about the risk of falling living standards – they would be ceding that risk to the University, which, with its billion-dollar balance sheet, is in a considerably better position to stomach that risk than poor graduate students. TAs thus stand to gain more than merely decent living wages; with their wages indexed to inflation, they also get insurance against higher-than-anticipated inflation.

McGill undergraduate students deserve a campus free of disruption and TAs who are not overworked and disgruntled. Graduate students deserve a decent standard of living.

The University would also gain from indexing wages to inflation. Since its wage bill will track inflation, the University could easily hedge against the risk of unexpected inflation hikes. The University would, in effect, pocket the savings on the cost of insuring against uncertainty in its financial outflows. Indeed, getting rid of real wage uncertainty increases the real economic pie in absolute terms: the gains can be shared between graduate students and the University.

Indexing wages to inflation is sustainable. Pay increases above the rate of inflation could bankrupt the University; those below the rate of inflation would steadily erode graduate students’ living standards. On the other hand, McGill can afford to increase pay at the rate of inflation, since the University’s receipts from tuition, endowments, and investment income could outperform inflation relatively easily.

McGill undergraduate students deserve a campus free of disruption and TAs who are not overworked and disgruntled. Graduate students deserve a decent standard of living. The University needs a financially affordable and sustainable commitment. Indexing wagees to inflation ensures all of the above in perpetuity.

Anusar Farooqui is a PhD student at the Department of Mathematics. To contact him, please email farooqui@math.mcgill.ca.

Comments posted on The McGill Daily's website must abide by our comments policy.